Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

<ul>
<li>The National Court of PNG and the independent expert have given the go ahead for <a href="https://www.smartkarma.com/entities/oil-search-ltd" target="_blank" data-smartkarma-citation="entities:773:1" rel="noopener">Oil Search Ltd (OSH AU)</a> shareholders to vote on the proposed merger with Santos.</li>
<li>If the Oil Search shareholders approve, the stock could be deleted at the close on 10 December. Spark Infrastructure could be deleted at the end of November following its acquisition.</li>
<li>There will be inclusions to the S&amp;P/ASX100 and S&amp;P/ASX 200 ahead of the regular rebalance. Then there will be more changes a couple of weeks later at the regular rebalance.</li>
</ul>


The National Court of PNG and the independent expert have given the go ahead for Oil Search Ltd (OSH AU) shareholders to vote on the proposed merger with Santos.
If the Oil Search shareholders approve, the stock could be deleted at the close on 10 December. Spark Infrastructure could be deleted at the end of November following its acquisition.
There will be inclusions to the S&amp;P/ASX100 and S&amp;P/ASX 200 ahead of the regular rebalance. Then there will be more changes a couple of weeks later at the regular rebalance.


Santos/Oil Search: Expert and Court Thumbs Up; Potential S&P/ASX Changes

S&amp;P Dow Jones Indices will announce changes to the S&amp;P/ASX 100, <a href="https://www.smartkarma.com/entities/s-p-asx-200" target="_blank" data-smartkarma-citation="entities:22901:1" rel="noopener">S&amp;P/ASX 200 (AS51 INDEX)</a> and S&amp;P/ASX300 as part of the September index review on 3 September and the changes will be effective after the close of trading on 17 September.The review period for the rebalance ends on 20 August, so there are only 3 days to go in the review period with 124 days completed.For the ASX100, we see <a href="https://www.smartkarma.com/entities/boral-ltd" target="_blank" data-smartkarma-citation="entities:1487:1" rel="noopener">Boral Ltd (BLD AU)</a> as a potential deletion following the reduction in its free float following <a href="https://www.smartkarma.com/entities/seven-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:803:1" rel="noopener">Seven Group Holdings (SVW AU)</a>'s tender offer. This is the possibility of another change with <a href="https://www.smartkarma.com/entities/steadfast-group-ltd" target="_blank" data-smartkarma-citation="entities:8181:1" rel="noopener">Steadfast (SDF AU)</a> replacing <a href="https://www.smartkarma.com/entities/beach-energy-ltd" target="_blank" data-smartkarma-citation="entities:795:1" rel="noopener">Beach Energy (BPT AU)</a> in the index.For the <a href="https://www.smartkarma.com/entities/s-p-asx-200" target="_blank" data-smartkarma-citation="entities:22901:1" rel="noopener">S&amp;P/ASX 200 (AS51 INDEX)</a>, we see <a href="https://www.smartkarma.com/entities/pinnacle-investment-management" target="_blank" data-smartkarma-citation="entities:20624:1" rel="noopener">Pinnacle Investment Management (PNI AU)</a>, <a href="https://www.smartkarma.com/entities/sealink-travel-group-ltd" target="_blank" data-smartkarma-citation="entities:6400:1" rel="noopener">Sealink Travel (SLK AU)</a>, <a href="https://www.smartkarma.com/entities/de-grey-mining-ltd" target="_blank" data-smartkarma-citation="entities:6192:1" rel="noopener">De Grey Mining (DEG AU)</a> and <a href="https://www.smartkarma.com/entities/amalgamated-holdings-ltd" target="_blank" data-smartkarma-citation="entities:20978:1" rel="noopener">Event Hospitality and Entertainment (EVT AU)</a> as potential inclusions, while <a href="https://www.smartkarma.com/entities/nuix-limited" target="_blank" data-smartkarma-citation="entities:31040:1" rel="noopener">Nuix Limited (NXL AU)</a>, <a href="https://www.smartkarma.com/entities/nrw-holdings-ltd" target="_blank" data-smartkarma-citation="entities:9271:1" rel="noopener">NRW Holdings (NWH AU)</a>, <a href="https://www.smartkarma.com/entities/g8-education-ltd" target="_blank" data-smartkarma-citation="entities:581:1" rel="noopener">G8 Education (GEM AU)</a> and <a href="https://www.smartkarma.com/entities/westgold-resources-ltd" target="_blank" data-smartkarma-citation="entities:24269:1" rel="noopener">Westgold Resources (WGX AU)</a> are potential deletions.For the ASX300, potential inclusions are <a href="https://www.smartkarma.com/entities/paladin-energy-ltd" target="_blank" data-smartkarma-citation="entities:10117:1" rel="noopener">Paladin Energy (PDN AU)</a>, <a href="https://www.smartkarma.com/entities/imugene-ltd" target="_blank" data-smartkarma-citation="entities:20276:1" rel="noopener">Imugene Ltd (IMU AU)</a>, <a href="https://www.smartkarma.com/entities/liontown-resources-ltd" target="_blank" data-smartkarma-citation="entities:20488:1" rel="noopener">Liontown Resources (LTR AU)</a>, <a href="https://www.smartkarma.com/entities/betmakers-technology-group-ltd" target="_blank" data-smartkarma-citation="entities:25489:1" rel="noopener">BetMakers Technology Group (BET AU)</a>, <a href="https://www.smartkarma.com/entities/novonix-ltd" target="_blank" data-smartkarma-citation="entities:29093:1" rel="noopener">Novonix Ltd (NVX AU)</a>, <a href="https://www.smartkarma.com/entities/dubber-corp-ltd" target="_blank" data-smartkarma-citation="entities:15396:1" rel="noopener">Dubber Corp Ltd (DUB AU)</a>, <a href="https://www.smartkarma.com/entities/johns-lyng-group-ltd" target="_blank" data-smartkarma-citation="entities:26649:1" rel="noopener">Johns Lyng (JLG AU)</a> and <a href="https://www.smartkarma.com/entities/strike-energy-ltd" target="_blank" data-smartkarma-citation="entities:12473:1" rel="noopener">Strike Energy (STX AU)</a>, while potential deletions are <a href="https://www.smartkarma.com/entities/bubs-australia-ltd" target="_blank" data-smartkarma-citation="entities:6296:1" rel="noopener">Bubs Australia (BUB AU)</a>, <a href="https://www.smartkarma.com/entities/synlait-milk-ltd" target="_blank" data-smartkarma-citation="entities:16298:1" rel="noopener">Synlait Milk (SML NZ)</a>, <a href="https://www.smartkarma.com/entities/integrated-research-ltd" target="_blank" data-smartkarma-citation="entities:6744:1" rel="noopener">Integrated Research (IRI AU)</a>, <a href="https://www.smartkarma.com/entities/maca-ltd" target="_blank" data-smartkarma-citation="entities:11390:1" rel="noopener">Maca Ltd (MLD AU)</a> and <a href="https://www.smartkarma.com/entities/medical-developments-international" target="_blank" data-smartkarma-citation="entities:18644:1" rel="noopener">Medical Developments International (MVP AU)</a>.The impact is quite large on the <a href="https://www.smartkarma.com/entities/s-p-asx-200" target="_blank" data-smartkarma-citation="entities:22901:1" rel="noopener">S&amp;P/ASX 200 (AS51 INDEX)</a> expected changes while there could be a large impact on <a href="https://www.smartkarma.com/entities/steadfast-group-ltd" target="_blank" data-smartkarma-citation="entities:8181:1" rel="noopener">Steadfast (SDF AU)</a> if it is included in the ASX100.

S&amp;P Dow Jones Indices will announce changes to the S&amp;P/ASX 100, S&amp;P/ASX 200 (AS51 INDEX) and S&amp;P/ASX300 as part of the September index review on 3 September and the changes will be effective after the close of trading on 17 September.The review period for the rebalance ends on 20 August, so there are only 3 days to go in the review period with 124 days completed.For the ASX100, we see Boral Ltd (BLD AU) as a potential deletion following the reduction in its free float following Seven Group Holdings (SVW AU)'s tender offer. This is the possibility of another change with Steadfast (SDF AU) replacing Beach Energy (BPT AU) in the index.For the S&amp;P/ASX 200 (AS51 INDEX), we see Pinnacle Investment Management (PNI AU), Sealink Travel (SLK AU), De Grey Mining (DEG AU) and Event Hospitality and Entertainment (EVT AU) as potential inclusions, while Nuix Limited (NXL AU), NRW Holdings (NWH AU), G8 Education (GEM AU) and Westgold Resources (WGX AU) are potential deletions.For the ASX300, potential inclusions are Paladin Energy (PDN AU), Imugene Ltd (IMU AU), Liontown Resources (LTR AU), BetMakers Technology Group (BET AU), Novonix Ltd (NVX AU), Dubber Corp Ltd (DUB AU), Johns Lyng (JLG AU) and Strike Energy (STX AU), while potential deletions are Bubs Australia (BUB AU), Synlait Milk (SML NZ), Integrated Research (IRI AU), Maca Ltd (MLD AU) and Medical Developments International (MVP AU).The impact is quite large on the S&amp;P/ASX 200 (AS51 INDEX) expected changes while there could be a large impact on Steadfast (SDF AU) if it is included in the ASX100.

ASX100/200/300 Index Rebalance Preview: Big Impact & Large Shorts

APAC IPOs & Placements

Zhen Zhou, Toh

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

<a href="https://www.smartkarma.com/entities/steadfast-group-ltd" target="_blank" data-smartkarma-citation="entities:8181:1" rel="noopener">Steadfast (SDF AU)</a> is looking to raise AUD200m from its placement to partially fund the acquisition of Coverforce, an insurance brokerage firm. We will look at the acquisition, deal dynamics, and run the deal through our ECM framework.

Steadfast (SDF AU) is looking to raise AUD200m from its placement to partially fund the acquisition of Coverforce, an insurance brokerage firm. We will look at the acquisition, deal dynamics, and run the deal through our ECM framework.

Steadfast Group Placement - An Immediately Accretive Acquisition

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

Adding to last week’s concerns reiterated above, additional developments which have further dampened our overall outlook include a breakdown in the global Discretionary vs. Staples ratio, price and RS deterioration for mainland China, Germany, and European Technology, and new lows in the NASDAQ Global Automobile index. Aside from Germany, other major indexes remain above support in Europe/UK and Japan.  We highlight a number of attractive opportunities in “defensive” Financials including electronic exchanges/markets, insurance, commercial/consumer financing, and select asset managers.

Adding to last week’s concerns reiterated above, additional developments which have further dampened our overall outlook include a breakdown in the global Discretionary vs. Staples ratio, price and RS deterioration for mainland China, Germany, and European Technology, and new lows in the NASDAQ Global Automobile index. Aside from Germany, other major indexes remain above support in Europe/UK and Japan.  We highlight a number of attractive opportunities in “defensive” Financials including electronic exchanges/markets, insurance, commercial/consumer financing, and select asset managers.

Global Equity Strategy: More Cracks Begin to Show

Director - Research, Consulting and Advisory, BondAdviser

Nicholas Yaxley

Director - Research, Consulting and Advisory

Australian bonds & fixed income research

BondAdviser

BondAdviser is the central reference point for intelligent information on Australian fixed income markets. We help you make informed decisions by providing unbiased research, transparent pricing data, analytics, portfolio tools and education.

BondAdviser has the broadest coverage of retail-accessible ASX-listed and over-the-counter Australian bonds and fixed income securities. We make it easy for you to review and compare investments before you place an order with your broker or dealer.

Thematic (Sector/Industry)

In <a href="https://www.bondadviser.com.au/blog/the-demand-we-have-been-waiting-for" target="_blank">November 2016</a> we stated a large proportion of redemptions would be reinvested in existing corporate issues to achieve some degree of sectoral diversification away from the banks. Since then, the demand/supply imbalance has squeezed trading margins on corporate hybrids to the point where some security valuations are being stretched from a trading margin risk perspective.Although we expect tight supply dynamics to continue and support expensive valuations, particularly for corporate listed securities, new investors should be aware of the inherent risk. For investors already holding these securities there is probably no reason to sell as scheduled corporate redemptions will continue to intensify demand in a relatively small market. We believe this situation of demand over supply will persist. However, given valuations are not reflective of risk profiles, we will be reviewing our recommendations if corporate hybrid margins continue to tighten.

In November 2016 we stated a large proportion of redemptions would be reinvested in existing corporate issues to achieve some degree of sectoral diversification away from the banks. Since then, the demand/supply imbalance has squeezed trading margins on corporate hybrids to the point where some security valuations are being stretched from a trading margin risk perspective.Although we expect tight supply dynamics to continue and support expensive valuations, particularly for corporate listed securities, new investors should be aware of the inherent risk. For investors already holding these securities there is probably no reason to sell as scheduled corporate redemptions will continue to intensify demand in a relatively small market. We believe this situation of demand over supply will persist. However, given valuations are not reflective of risk profiles, we will be reviewing our recommendations if corporate hybrid margins continue to tighten.

Valuations Stretched on ASX-Listed Corporate Hybrids

Australia

Medibank Private Limited offers private health care coverage for hospital and ancillary services. The Company offers a range of health insurance products such as health, travel, pet, and life coverage to overseas students and visitors. Medibank serves customers throughout Australia.

NIB Holdings Ltd. offers health insurance products.  Depending on the specific product, the Company covers ambulance costs; and reimburses for costs not covered by Medicare including dental, optical, physiotherapy and natural therapies; and some hospitalization costs.

AUB Group Limited provides financial services. The Company offers equity-based risk management, insurance broking, and specialist underwriting agencies, as well as focuses on risk solutions for clients and strengthening our partners risk advisory capabilities.

PSC Insurance Group Limited provides insurance brokerage services. The Company offers services such as risk management, workers compensation, business protection, worth insurance, claims settlements. PSC Insurance Group conducts its business globally.

Latitude Group Holdings Limited operates as a holding company. The Company, through its subsidiaries, provides personal, commercial, and business insurance products and services, as well as offers loans and credit card solutions. Latitude Group Holdings serves individuals, governments, municipalities, and businesses.

Generation Development Group Limited operates as an investment company. The Company provides tax effective investment solutions and development capital to financial sector businesses. Generation Development Group serves customers in Australia.

Bendigo and Adelaide Bank Limited offers a variety of banking and other financial services, including first mortgage housing finance, retail and business banking, commercial finance, funds management, treasury and foreign exchange services, superannuation and trustee services. Bendigo also offers internet banking.

Insurance Australia Group Limited (IAG) is an Australian-based international general insurance group with operations in Australia, New Zealand, and Asia. The Group provides a range of personal and commercial insurance products, primarily motor vehicle and home insurance.

Challenger Limited is an investment management firm  The Company offers annuities and other retirement income products as well as manages assets for domestic and international clients.

Virgin Money UK PLC provides financial services. The Company offers online mobile solutions such as banking and other related activities. Virgin Money UK serves customers in the United Kingdom.

Max Financial Services Limited operates as a life insurance company. The Company, through its subsidiaries, provides life insurance and health insurance products, as well as healthcare services. Max Financial Services serves insurance and health industry worldwide.

Selective Insurance Group, Inc., through its subsidiaries, offers a broad range of commercial insurance products, alternative risk management products, and managed care and related services.  The Company's customers include small to medium-sized businesses, governmental entities, selected classes of light industry, as well as individuals and families.

Enstar Group Ltd. acquires and manages insurance and reinsurance companies in run-off. The Company also provides management, consulting and other services to the global insurance and reinsurance industry.

Kemper Corporation is a financial services provider. The Company specializes in property and casualty, life, health and accident insurance products and services.

Lincoln National Corporation is a financial services company headquartered in Radnor, PA, marketed as Lincoln Financial Group.  The company offers diverse solutions including: annuities; life, group life, disability and dental insurance; employer-sponsored retirement plans; savings plans; and comprehensive financial planning and advisory services.

American Equity Investment Life Holding Company develops, markets, issues, and administers annuities and life insurance products through its subsidiaries. The Company is a full-service underwriter of an array of annuity and insurance products, and is licensed to sell its products throughout the United States.

American Equity Investment Life Holding (AEL US)

White Mountains Insurance Group Ltd., through its subsidiaries and affiliates, provides property and casualty insurance, and reinsurance.  The Company's primary strategic goal is to invest in operating businesses in which management has knowledge and experience.

Dongbu Insurance Co., Ltd. provides a variety of non-life insurance services such as auto, long-term casualty and property, pension and retirement, fire and marine, and leisure insurance products.

Hanover Insurance Group Inc operates as a holding company. The Company, through its subsidiaries, offers property and casualty insurance products including personal lines, commercial lines and other property casualty through independent agents.

Assured Guaranty Ltd. provides financial guaranty insurance and reinsurance coverage. The Company's products include guaranties for municipal finance, structured finance and infrastructure finance.

Steadfast Group Ltd is a provider of services to broker businesses across Australia, New Zealand and Singapore. The Company has equity interests in insurance broker businesses, underwriting agencies and other complementary businesses.

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Steadfast (SDF AU)

Santos/Oil Search: Expert and Court Thumbs Up; Potential S&P/ASX Changes

Spark Infra and Oil Search could be deleted from the ASX100 & ASX200 indices ahead of the regular rebalance. Then there will be more changes at the...

Brian Freitas

ASX100/200/300 Index Rebalance Preview: Big Impact & Large Shorts

There are a lot of changes expected across the ASX100, 200 & 300 indices at the September rebalance. A lot of those stocks will have a large impact...

Brian Freitas

Steadfast Group Placement - An Immediately Accretive Acquisition

Steadfast (SDF AU) is looking to raise AUD200m from its placement to partially fund the acquisition of Coverforce, an insurance brokerage firm.

Zhen Zhou, Toh

Global Equity Strategy: More Cracks Begin to Show

Adding to last week’s concerns reiterated above, additional developments which have further dampened our overall outlook include a breakdown in the...

Vermilion Research

Valuations Stretched on ASX-Listed Corporate Hybrids

In November 2016 we stated a large proportion of redemptions would be reinvested in existing corporate issues to achieve some degree of sectoral...

BondAdviser

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